By Susan Hoover, CFA
Demographic shifts and technological advancements - what effects will these factors have on the global economy?
Two wildly different ones, but together they will exert a massive influence on economic growth and the outlook for the world economy for generations, according to economist and author Dambisa Moyo, in her address at the CFA Institute Middle East Investment Conference 2016 in Bahrain.
Setting a bearish tone, Moyo said that the world economy will never again experience the rapid growth rates seen prior to the financial crisis of 2007-2008. She found this to be "incredibly damning."
In order to put a significant dent in world poverty, Moyo continued, there must be a global growth rate of around 7% a year. At best, she said, we are expanding at 2.5% annually. And in the emerging markets, where the vast majority of the global population lives, few nations are hitting that 7% mark. Indeed, Brazil is in the midst of a recession.
As for the headwinds behind this stubborn decline in economic growth, Moyo pointed to technology and demographics.
Over the next 20 years, 47% of all jobs in the United States will be eroded or disrupted by technology, Moyo said. Think of the changes caused by the shift away from agriculture since the early 1900s. At the outset of the last century, Moyo observed, much of the US workforce was involved in agriculture. Today, less than 2% of the US workforce is. This transition is largely a function of technological advancements, and Moyo anticipates similar transformations in the years ahead.
Most of the heavier automation is taking place where much of the world population works, in the unskilled or low-skilled positions of the manufacturing sector. This leads to fewer jobs and fewer hours worked - to less human productivity - and is accompanied by a
